Ask Matt: Is Royal Caribbean Cruises’ stock sunk?
Q: Is Royal Caribbean Cruises’ stock sunk?
A: Cruise-ship operator Royal Caribbean (RCL) is the latest company to get torpedoed by a weak guidance.
Shares of the company dropped $12.82, or 15%, to $71.70 Tuesday after telling investors profit in the current quarter and year would fall short of what analysts were expecting. The company says it plans to earn 30 cents a share on an adjusted basis in the current quarter, which is 23% lower than what analysts were forecasting, says S&P Capital IQ. For the year, the company is now telling investors to expect it to earn between $5.90 and $6.10 a share. That’s below the $6.12 a share analysts were calling for.
The company claims its not being hurt by concerns of the Zika virus. And it’s important to point out the company’s adjusted profit per share of 94 cents a share in the fourth quarter did top expectations by 2%. Revenue during the quarter of $1.9 billion was a little light - about 2.5%. Shares are down 4% the past year.Analysts remain bullish on Royal Caribbean, rating the stock “outperform” and saying shares could trade for $103.83 a share in 18 months. Long-term growth is expected to be 27% a year. But given how volatile the broad market has become, investors want companies that see clear and smooth sailing ahead.
Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.